Austrian Banks’ Capital Needs Probably Rose to $5.5 Billion

Austrian banks’ capital shortfall probably worsened over the third quarter as losses announced at Erste Group Bank AG (EBS) and Oesterreichische Volksbanken AG (VBPS) put the institutions further from a 9 percent target.

Andreas Ittner, the head of banking supervision at the Austrian central bank, said today it was a “plausible” estimate to say the shortfall of the three Austrian lenders covered by the European Banking Authority widened to about 4 billion euros ($5.5 billion) compared with the target ratio set by the EBA.

The gap for Erste, Volksbanken and Raiffeisen Zentralbank Oesterreich AG stood at 2.9 billion euros at the end of June, according to the EBA. For the third quarter, Erste reported a 1.49 billion-euro loss on writedowns and provisions on Oct. 28, and Volksbanken predicted an annual loss of as much as 750 million euros on Oct. 14.

“We’re currently requesting the numbers as of the end of September” from the banks, Ittner told journalists in Vienna. Asked if the shortfall was 4 billion euros, he said this was a “plausible estimate.” He declined to elaborate.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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